ANSWERS: 2
  • The 2007 standard deduction for an individual, if single, is $5,350.
  • the standard deduction is $5350, and your exemptions are in addition to that. Each exemption is worth $3400 and is allowable for each member in the household. For example, a single parent takes a standard deduction of $5350 AND two exemptions totaling $6800. The entire amount comes off of the gross income. assume a salary of $40000/year; the taxable income using standard deductions/exemptions would be 40,000- 5350 - 6800 = 27,850the amount owed in taxes is calculated by using the tax rate schedule: -the first $7825 of taxable income is taxed at 10% = $782.50 -the amount between $7825-$31850 is taxed at 15% = ($20,025*15%) = $3004 Total payable tax: 3004 + 782.50 = 3786 In addition to the standard deduction, you are allowed to subtract things like costs for higher education, student loan interest, qualifying IRA contributions, etc from your gross income to come to the taxable income amount...

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